Eco­nomic de­vel­op­ment plan putting lo­cals at its core

The Star Early Edition - - OPINION & ANALYSIS -

Our pol­icy is a mix of strate­gies at com­mu­nity level that will re­vive the econ­omy

THE STRUC­TURE of the City of Jo­han­nes­burg’s econ­omy, its eco­nomic his­tory and the en­ergy of its peo­ple lie at the cen­tre of lo­cal eco­nomic de­vel­op­ment pol­icy .

One of the fore­most the­o­rists of de­vel­op­ment economics, Michael Sher­raden , con­tends that lo­cal eco­nomic de­vel­op­ment should ex­ploit lo­cal assets to grow out­put. His the­ory finds value in em­pow­er­ing lo­cal per­sons, es­pe­cially those on the mar­gins of the main­stream .

For more than 130 years, Joburg’s econ­omy has been the lo­ca­tion of op­por­tu­ni­ties. The min­ing boom pro­vided jobs , its out­put ac­counted for a sig­nif­i­cant share of the na­tional econ­omy, its re­sources stim­u­lated in­dus­try and its peo­ple gen­er­ated an en­ergy shared by the rest of the pop­u­la­tion.

Over the years, re­newal pro­grammes have suc­ceeded one an­other, but chal­lenges abound. For ex­am­ple the un­em­ploy­ment rate of 33%. Sec­tor anal­y­sis shows that cru­cial in­dus­tries have shifted op­er­a­tions . In 1996, man­u­fac­tur­ing ac­counted for 20% of the econ­omy but by 2013 had shrunk to 16%. Con­trac­tions were recorded in other sec­tors , in­clud­ing elec­tric­ity and other house­hold con­sum­ables that de­clined by 1% and 7% re­spec­tively. Min­ing pro­duc­tion has also de­clined. Sec­toral de­cline is the lead­ing vari­able in high lev­els of un­em­ploy­ment oc­cur­ring in an econ­omy that ex­pe­ri­enced job­less growth. Other im­pli­ca­tions of sec­tor de­cline are in­suf­fi­cient re­search and in­no­va­tion , hu­man cap­i­tal stag­na­tion and a dearth of in­no­va­tion.

The pri­vate sec­tor and mu­nic­i­pal­ity should work with Wits Univer­sity and the Univer­sity of Jo­han­nes­burg on re­search and de­vel­op­ment. Business cy­cles and com­pet­i­tive­ness economics in other mar­kets in­di­cate that th­ese vari­ables tend to form a vi­cious cy­cle that leads to the de­struc­tion of the lo­cal eco­nomic as­set.

For the Joburg econ­omy, its sec­toral eco­nomic his­tory should act as a source of re­newal for in­creas­ing in­put and pro­mot­ing em­ploy­ment. The re­vival of man­u­fac­tur­ing is a so­lu­tion that will pro­mote greater labour ab­sorp­tion for semi-skilled and highly skilled co­horts. The rise in the city fi­nan­cial ser­vices sec­tor – from 22% in 1996 to 32% by 2013 – shows that the re­vival of man­u­fac­tur­ing re­quires ap­pre­ci­a­tion of lo­cal peo­ple to ex­ploit ca­pa­bil­i­ties and re­sources, and con­vert th­ese into com­pet­i­tive prod­ucts for the global mar­kets.

The new city ad­min­is­tra­tion con­tin­ues to make sub­stan­tial fi­nan­cial re­sources avail­able for hu­man cap­i­tal and en­ter­prise de­vel­op­ment .

The grow­ing pop­u­la­tion is a source of eco­nomic growth. The pop­u­la­tion is around 4.94 mil­lion res­i­dents . Joburg re­ceives about 3 027 mi­grants a month . This pop­u­la­tion will come in handy in in­fras­truc­ture de­vel­op­ment, man­u­fac­tur­ing and agri-pro­cess­ing. In­ter­nal pop­u­la­tion move­ments have put a lot of pres­sure on our ca­pac­ity to pro­vide ser­vices. The ma­jor needs are hous­ing and set­tle­ments re­quire­ments, roads, waste man­age­ment, se­cu­rity and com­mu­nity so­cial ser­vices .

Con­sis­tent with the ethos of com­mu­nity de­vel­op­ment, the shared growth brand of Joburg’s pro­gramme pri­ori­tises in­vest­ment in lo­cal in­fras­truc­ture. In­fras­truc­ture in­vest­ment span roads, ur­ban hous­ing, town­ship gen­eral eco­nomic de­vel­op­ment, com­mu­nity clean­ing ser­vice, schools and safety. Our ad­min­is­tra­tion has planned for the pro­vi­sion of th­ese in a way that will pro­vide mul­ti­plier ef­fects .

The spirit of our pro­cure­ment pol­icy en­cour­ages win­ning bid­ders to pro­vide in­tern­ship and ap­pren­tice op­por­tu­ni­ties to stu­dents and grad­u­ates . In­fras­truc­ture de­vel­op­ment of­fers un­par­al­leled op­por­tu­nity to launch pub­lic works pro­grammes. How­ever, this should not be an op­por­tu­nity to pro­mote job ca­su­al­i­sa­tion and tem­po­rary so­lu­tions. Rather, em­ploy­ment op­por­tu­ni­ties should be used for business cre­ation by com­mu­ni­ties as they col­lab­o­rate to cre­ate en­dur­ing co-op­er­a­tives .

This ap­proach takes cog­ni­sance of the ca­pa­bil­i­ties and en­tre­pre­neur­ial en­ergy of its peo­ple. Joburg is at work in the in­for­mal econ­omy. A walk in the street re­veals en­trepreneurs pro­vid­ing as­sorted ser­vices . Th­ese ac­tiv­i­ties act as an in­alien­able source of in­come and em­ploy­ment . Our ap­proach should in­clude for­mal­is­ing them, pro­vid­ing an ideal en­vi­ron­ment for lo­cal-as­set business growth, and pro­tect­ing our en­trepreneurs from street pimps and sharks. Prac­ti­cal steps in­clude pro­vid­ing the nec­es­sary sup­port for reg­is­ter­ing such busi­nesses , as­sist­ing pro­pri­etors to meet reg­u­la­tory re­quire­ments and pro­vid­ing trad­ing struc­tures, pub­lic toi­lets and ad­e­quate se­cu­rity.

Our de­vel­op­ment pol­icy is a con­flu­ence of strate­gies at com­mu­nity level that will re­vive the econ­omy and pro­pel it to lofty eco­nomic heights. It’s a cel­e­bra­tion of lo­cal peo­ple, their eco­nomic ac­tiv­i­ties, skills and ca­pa­bil­i­ties that will re­write the eco­nomic for­tunes of the city.

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